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Facts
The assessee challenged a CIT(A) order that remanded the matter to the Assessing Officer (AO) for fresh assessment, which originated from an assessment under Section 144 read with Section 147 of the Income Tax Act, 1961. The case involved the sale of an immovable property where the assessee acted as a Power of Attorney holder, and the department questioned the delayed registration of the sale deed and the assessee's income liability from the transaction.
Held
The tribunal set aside the CIT(A)'s remand order, holding that the entire sale consideration for the property was received by the actual owner, Shri Khushal Chand Daga, in 2001. Since the assessee merely acted as a Power of Attorney holder and had no income from the transaction, no tax liability arose for the assessee. The tribunal concluded that the CIT(A) should have decided the appeal on merits instead of remanding it.
Key Issues
Whether the CIT(A) was justified in remanding the assessment matter for fresh adjudication or should have decided it on merits; and whether the assessee, acting as a Power of Attorney holder, was liable for income tax on a property sale where the consideration was received by the actual owner much earlier.
Sections Cited
144, 147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: SHRI GAGAN GOYAL, AM& SHRI NARINDER KUMAR, JM
vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER .
Assessee-appellant is feeling aggrieved by order dated 04.10.2024 passed by Learned CIT(A), National Faceless Appeal Centre, Delhi, whereby appeal filed by the assessee challenging assessment order dated 06.12.2018, passed u/s 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), has been set aside, and the matter Praveen Daga vs. ITO remanded to the Assessing Officer with the direction for passing of assessment order afresh.
Arguments heard. File perused.
Ld. AR for the appellant has submitted that even though the assessee did not appear before the Assessing Officer, despite notices, during appellate proceedings all relevant documents were submitted by the assessee, whereupon Learned CIT(A), NFAC called for remand report from the Assessing Officer, but even then, no final adjudication was made. The contention is that in the given situation, Learned CIT(A) should have taken into consideration the entire material verified by the Assessing Officer, and decided the appeal on merits, instead of remanding back the matter to the Assessing Officer for afresh assessment.
On behalf of the department, it cannot be disputed that as regards the documents submitted by the assessee-appellant before Learned CIT(A), remand report was called, but even then the matter was remanded back to the Assessing Officer. Ld. DR has referred to para 3.5 of the remand report wherein the Assessing Officer observed that the assessee had failed to submit documents in support of the plea that some dispute was going on Praveen Daga vs. ITO regardingthe subject land, and also documents in support of receipt of payment by Shri Khushal Chand Daga. As further pointed out, the assessee failed to explain before the Assessing Officer as to why the sale was got registered in the October, 2010, when the agreement to sell was executed in January, 2001. Therefore, Ld. DR contended that Learned CIT(A) was justified in remanding the matter to the Assessing Officer for fresh assessment.
In order to appreciate the above contentions raised on behalf of the parties, it would relevant to refer to the reply dated 30.08.2024 submitted by the assessee to the remand report. As per said response, the assessee had produced in the remand proceedings before the Assessing Officer following 7 documents. Copy of papers related to land. Copy of sale deed dt. 05.10.2010. Copy of Power of Attorney. Copy of documents of land related to earlier owner. Copy of affidavit of land owner Sh. Khushal Chand Daga. Copy of Affidavit of the assessee. Copy of affidavit of purchasers.
It is true that the assessee did not produce before the Assessing Officer, or during the appellate proceeding, any document to show that Praveen Daga vs. ITO there was some dispute going on as regards the said land, but, the question arises whether any such document was required, when the assessee had produced the above said set of documents ? On going through the copy of sale deed dated 05.10.2010, available at page 16 to 25 of the paper book of the appellant, it would transpire that the same was executed by the assessee, only in the capacity of a Power of Attorney holder of Sh. Khushal Chand Daga. Copy of the said Power of Attorney dated 14.03.2002 is available at page 26 to 28 of said paper book. It was executed by Shri Khushal Chand Daga in favour of the assesseeappointing him as his Power of Attorney to perform various acts, including to sale the subject immovable property i.e. plot No. K-29, Scheme No. 4, Tonk Road, Jaipur.
As is available from the sale deed, on 01.06.2001, Khushal Chand Daga, who claimed himself to be owner of the subject property, executed an agreement to sell in respect of the said plot, in favour of Anupam Sharma party No. 2 therein, and also received a sum of Rs. 1,00,000/- by way of entire sale consideration. This goes to show that the entire sale consideration was received by Shri Khushal Chand Daga in the year 2001 itself. Copy of the agreement to sell also forms part of the paper book of the appellant.
Praveen Daga vs. ITO It was on the basis of above said Power of Attorney executed by Sh. Khushal Chand that Shri Praveen Daga, the assessee executed sale deed in favour of Shri Anupam Sharma.
As noticed above, the entire sale consideration had already been received. It is a significant to note that even possession of the plot was delivered by Shri Khushal Chand Daga to the proposed buyer, at the time of execution of the agreement itself i.e. 15.06.2001. Simply because the sale deed came to be executed about 9 years after the execution of the agreement, the department could not doubt the sale transaction in respect of said plot, especially when the entire sale consideration was received by Khushal Chand Daga, the owner in June, 2001 itself. This goes to show that the assessee had no income from the said sale transaction either in the FY 2001- 2002 or in the F.Y. 2010-11. Consequently, it can safely be said that as regards the assessee there was no incident of tax so as to make him liable for payment of income tax. Result 9. In view of the above discussion and the reasons, the impugned order passed by the Learned CIT(A) cannot be sustained and same deserves to be set aside.
Praveen Daga vs. ITO Consequently this appeal is allowed, and the impugned order passed by Learned CIT(A) is hereby set aside, while holding that the assessee- appellant was not liable for payment of any income tax, as regards the said transaction of sale of the above said immovable property by its actual owner by Khushal Chand Daga. File consignment to the record room after the needful is done by the office. Order pronounced in the open court on 26/03/2025.